New Media Investment (NEWM) PT Raised to $28 at Compass Point Amid Pending Equity Raise

Compass Point analyst Jason Stewart reiterated a Buy rating and boosted his price target on New Media Investment Group (NYSE: NEWM) to $28.00 (from $25.00) following the announcement of a $150mm equity.

Stewart commented, "We are increasing our 2015 EBITDA estimate to $163mm from $125mm to reflect better growth prospects from the deployment of fresh equity into local media company acquisitions during 2015. Our revised estimates reflect the deployment of $150mm of equity, leverage of 2x EBITDA, and an average price/EBITDA multiple of 4x. Our previous earnings and cash flow estimates reflected $50mm EBITDA growth from acquisitions. Our new estimates reflect $88mm of EBITDA growth distributed evenly over the course of 2015. Additionally, we are increasing our price target to reflect a peer-average Enterprise Value (EV) to EBITDA multiple, although, NEWM's acquisition strategy positions the company for higher earnings growth relative to peers. Despite secular headwinds, NEWM's publications remain relevant to their local markets and stockholder value will continue to be created through growth in revenue and cash flow by stabilizing the core traditional media business, expanding digital marketing services business (Propel), growing the online advertising business and most importantly, pursuing strategic acquisitions of high quality local media assets at attractive valuation levels."

For an analyst ratings summary and ratings history on New Media Investment Group click here. For more ratings news on New Media Investment Group click here.

Shares of New Media Investment Group closed at $24.33 yesterday.

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